Tuesday, February 28, 2017

Type of Estates

As English society evolved, the "incidents of tenure" (i.e., obligations to the lord) became regularized, and decreased over time. By the time Canada inherited British property law, the only incident of tenure left was "Escheat", that is, when a tenancy ends, the land reverts back to the lord. Even today, when someone dies without an heir, their land becomes property of the Crown (i.e., the government).

With the passage of the Tenures Abolition Act in 1660, although all land was still technically owned by the Crown, peasants could buy and sell their rights to the land they were living on, as well as pass it on by will or by gift. This type of property right became known as an "estate in free and common soccage" or a "free estate". This is why property rights over land are known as "real estate".

An "estate", in English medieval legal parlance, was an amount of time over which one held property rights. There are three types of estate: Fee simple, fee tail and life estate.

Fee Simple

This is the most prevalent type of common law estate. It is what most people think of when they speak of "owning" land. Although the land is technically owned by the Crown, the holder of fee simple can use the land, exclude others from it, and dispose of it.

Under fee simple, the rights to land transfer automatically from the holder of the fee simple to his heir. The holder of the rights in fee simple can grant the land to someone other than his heir. In order to do this, he must use the phrase to [the new owner] and his heirs. Any other phraseology will not legally transfer fee simple by grant. It will instead be regarded as a "life estate"

Life Estate

The other main type of estate is the life estate. Very simply, this means that someone holds the rights to the land for the duration of his life, after which it reverts back to the owner in fee simple or his heirs. For instance, an elderly landowner might remarry late in life. He may then wish to leave the estate to his new wife for the remainder of her life; when she dies, the land will revert to his heirs, rather than her heirs.

There is no particular phraseology required to grant a life estate. Something such as "to X for life" is usually sufficient. If the phrase "to X and his heirs" is not used, then the transfer is presumed to be a life estate.

Fee Tail

Fee tail is a rare estate, abolished in Canada everywhere except for Manitoba, in which only the lineal heir may inherit land. One can only transfer one's property rights in the land for as long as one lives; afterwards, the property rights revert to one's lineal descendents. This limits how land can be bought and sold, therefore reducing the value of the land.